April Disciplinary Actions

Disciplinary Actions by FINRA: April 2020

FINRA publishes a monthly review of disciplinary actions taken against both firms and individuals. These disciplinary actions are useful tools to look for trends in violations and other sanctions. These trends can assist you in identifying weak areas in your firm’s compliance programs or surveillance. Below is a list of a few key actions from last month.

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FINRA Disciplinary Actions

FINRA Disciplinary Actions from January 2020

The Monthly Disciplinary and Other FINRA Actions report from January may provide a glimpse into the conduct by Firms and individuals that result in disciplinary proceedings. For Firms, a failure to evolve a program can be costly. For individuals, failure to disclose despite Firm-acknowledged requests may result in FINRA sanctions.

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Recent Enforcement Actions from FINRA

As summarized below, FINRA recently announced some recent enforcement actions against member firms that we wanted to share with you.  We have selected these specific cases to share as we feel these are very important areas of compliance within a broker-dealer.  More importantly, each of the examples summarized below were easily preventable.  Firms must ensure that its personnel receive adequate training and have the requisite experience when assigned supervisory responsibilities, and also have an obligation to ensure its policies and procedures are being followed. Read More…

Nontraditional Exchange-Traded Funds: Suitability Guidelines

On June 8, 2016, FINRA published a News Release to announce that it had fined Oppenheimer & Co. Inc. (“Oppenheimer”) $2.25 million for failing to reasonably supervise transactions in nontraditional exchange-traded funds (“ETFs”). Through this disciplinary action, FINRA has made its expectations abundantly clear: A broker-dealer offering nontraditional ETFs must establish, maintain, and enforce an effective system for supervising transactions in these complex products. In this blog post, we identify what Oppenheimer did wrong so that your firm does not make the same mistakes. We then describe how your firm can use “suitability guidelines” to mitigate the risk of unsuitable recommendations involving nontraditional ETFs.

What Are Nontraditional ETFs?

The term “nontraditional” is commonly used to describe ETFs that are leveraged, inverse, or use other complex strategies to gain access to an index or underlying asset class. Nontraditional Read More…